Articles

Non-Compliant Products In The Building Industry

Non-Compliant Building Products

On 23 June 2015 the Senate referred an inquiry into non-conforming building products to the Senate Economics References Committee for inquiry with particular reference to:

  1. the economic impact of non-conforming building products on the Australia building and construction industry;
  2. the impact of non-conforming building products on:
    1. industry supply chains, including importers, manufacturers and fabricators;
    2. workplace safety and any associated risks;
    3. costs passed on to customers, including any insurance and compliance costs; and
    4. the overall quality of Australian buildings;
  3. possible improvements to the current regulatory frameworks for ensuring that building products conform to Australian standards, with particular reference to the effectiveness of:
    1. policing and enforcement of existing regulations;
    2. independent verification and assessment systems;
    3. surveillance and screening of imported building products; and
    4. restrictions and penalties imposed on non-conforming building products; and
  4. any other related matters.

Enforcement in Australia

The inquiry is a culmination of efforts by building industry participants to address the impact of non-compliant products on productivity and safety and to encourage the stricter enforcement of Australian Codes and Standards relating to the building industry.

With more products being sourced overseas a key concern was that compliance and enforcement in Australia had not kept pace with changes to Australia’s economy and where or how products were sourced or manufactured.

Compliance Campaign

Since 2012, the HIA has spearheaded a campaign for greater compliance mechanisms and to better educate builders, contractors and suppliers on the importance of compliance.

To support the campaign the Australasian Procurement and Construction Council prepared a comprehensive booklet, “Procurement of Construction Products, A guide to achieving compliance” outlining the regulatory environment and standard conformance regimes and how products are determined to be fit for purpose in Australia.

Lacrosse Tower

Non-compliance issues hit the headlines when the façade of the Docklands Lacrosse tower in Melbourne caught fire after a cigarette was left on a balcony table. The fire engulfed 13 stories in 15 minutes.

The cladding used on the building was found to be highly inflammable and a non-compliant product.

After testing undertaken by the fire brigade a Melbourne Fire Board officer was quoted as saying that the cladding did not meet the standard required by the Building Code of Australia necessary to avoid the spread of fire.

As a result of the fire, a class action is being considered by the apartment owners.

There is potential for the claim to include not only the builder but the architect who specified the product and the certifier who certified that the product complied with the Code.

The national secretary of the United Firefighters Union is also quoted as saying that the union was seeking legal advice about holding builders personally liable for members injured or killed fighting a blaze in a high rise complex where the builder had knowingly used non-compliant products.

Risks

Non-compliance issues have not just been limited to cladding but have also been found in the use of products such as cabling, ducting, steel and structural formwork.

The use of non-compliant products should be of concern for building industry participants as it presents risks both for their business, and personally, should it be found that they specified or used non-compliant products which resulted in damage to property or personal injury or death.

In addition there is the additional risk that a participant’s insurer may not cover claims for compensation for damage or injury resulting from the use of a non-compliant product.

National Construction Code

All the States and Territories have in place legislation which references the National Construction Code as the technical standard for building products used in construction.

As there is a legal requirement for compliant products to be used, the use of non-compliant products may support a claim for negligence or misrepresentation and an award for damages.

Further, the model work health and safety legislation which has now been implemented in most States and Territories places obligations on persons designing structures to ensure they are designed to eliminate risk as far as is reasonably practicable.

Where it is found that a non-compliant product was specified in the design, the designer may also be open to prosecution for not ensuring the risk was eliminated.

Conclusion

The extent of the use of non-compliant products may become more evident once the inquiry commences. However, it is still incumbent on building industry participants to ensure as far as is reasonably practicable that products comply with the relevant codes and standards.

Kelvin Keane is a Senior Associate in the Kreisson Construction & Engineering team.

This communication has been prepared for the general information of clients and professional associates of Kreisson Legal. You should not rely on the contents. It is not legal advice and should not be regarded as a substitute for legal advice. The contents may contain copyright.